Don’t Underestimate the Drought

by | Jan 12, 2023 | News

I was interviewed by the FPJ at Fruit Attraction, Madrid recently. I was moaning about labour shortages, lack of support on immigration from government, hyper-inflation, production being driven abroad etc. I’m good at moaning. I finished off the interview with another subject to moan about – the drought. I said at the time, back in early October, “don’t underestimate the drought”.

 We’re now starting to see the stats coming through for the 2022 growing season to support that statement. Let’s just pick on one crop to illustrate this. A crop close to my heart – the humble onion. I have to declare an interest here. We grow 550 acres of onions ourselves in East Anglia. We also grade & pack around a thousand tonnes of onion per week at our packhouse in Lincs which is a joint-venture with our partners AH Worth. I’m also a long-standing committee member, Director and former Chair of BOPA – British Onion Producers Association.

A few years back BOPA were concerned about the accuracy of the annual stats for onion production in the UK. Growers were being asked to submit their acreage and yields. If you ask a grower to do that you’ll not be surprised to hear that what he/she tells you will be on the pessimistic side. So, we came up with a plan to ask all the seed houses for details of their seed sales in the UK. Their main concern was confidentiality so we addressed this by asking them to send the results to a Chartered Accountant. He gave them an assurance, in writing, that any information they provided would be treated with the utmost discretion. Furthermore, the accountant would compile the stats and the seed-houses would get a copy of the results which is good info for them too. Everyone’s a winner! The point I’m making here is that the stats BOPA publish below for the forecast of the UK onion crop are produced using a method which is about as accurate as you can get.

So, the headline figure is the UK is down 100,000 tonnes. That’s a lot. As a nation we usually grow around 450,000t and consume around 800,000t. We import onions from all over the world as it’s a truly global commodity but most of the shortfall is from the Netherlands and Spain. As you can see, it’s not just down to the drought. Part of the problem is an 8.5% drop in plantings. Almost all the major onion growing countries throughout Europe are down on plantings. Why? Growers moving out of veg and towards more profitable, less risk, less labour-intensive crops such as cereals. Also, for northern European growers, onions are an energy hungry crop. We basically blast heat through our onions stores to get the temp up to around 27°C to crisp them up. Then we slowly reduce the store to ambient temperature. And then if we decide to keep the onions for sale into the new year, we flick the fridges on and drop the temp in store to around 0.5°C around now, mid/late November. That takes a lot of energy.

There’s a market research organisation in Germany called AMI that compiles the stats for all the major onion growing countries in Europe. The two biggest growing nations by far are well down on volume partly due to lower plantings but mainly down to the drought. Spain is estimated to be down from 1.567 million tonnes to 1.198mt. The Netherlands is estimated to be down from 1.768mt to 1.494mt. Overall, the European crop this season is estimated to be down 13.4% from 7.293mt to 6.314mt. So, the headline figure here is Europe on the whole is down a million tonnes. That’s huge. If a commodity is down a couple of percent, it can have a major impact on price and availability. To be down an estimated million tonnes or 13.4% across the whole of Europe, is a massive shortfall. On top of this, there’s a major problem throughout Europe this season with fusarium which is a fungal disease. For onions it manifests itself as base rot and again, the culprit is the drought which caused stress on the plant resulting in fusarium. 

The UK spot price for onions is currently almost double the price of this time last year. That sounds like the answer to all our prayers but most UK grown onions are forward sold on contract to the UK retailers. Let’s just say the retailers are offering nothing like a 100% increase in the price. Nowhere near. 

Sorry to be the prophet of doom and gloom but sadly this example of just one crop highlights the challenges of not just hyper-inflation, but also the impact of the drought, facing our growers at the moment. See, I told you I’m good at moaning.